Oil and Gas (Enterprise) Bill

Before we adjourned, we had changed from the gas side of the Bill to the oil installations in Part IV, which concerns offshore activities and, as noble Lords will know, Clauses 21 and 22 repeal Section 3 of the 1964 Act and replace it with new provisions, with the application of the criminal and civil law, in relation to installations, including the extension of powers of constables regarding installations and in cross-boundary fields, to cite the Financial Memorandum.

The matter with which we are concerned received some debate in another place at earlier stages of the Bill, and as Clause 21 concerns the application of the criminal law and is very brief, it raises questions which need some clarification. The clause is important because it deals with the enforcement measures which we have discussed and aspects of the Bill which are to follow. We are concerned with territorial waters, and I would say in passing that in another place I was concerned with the drafting, presentation and passing of the Fisheries Act 1976, and that covered the inauguration of the 200-mile limit which was internationally agreed under the terms of the United Nations Law of the Sea Conference and provided the basis for the international extension of national limits to the extent of 200 miles, as is obvious.

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Would the Minister say at what point the 200-mile national limits converge with the limits of adjoining countries? I have in mind Norway, the Irish coast and the French coast, although oil is, of course, largely found in the northern areas, around Scotland in particular, although Wales may be affected. I should like to know whose responsibility is involved in the areas between the national limits and what is meant by "territorial waters"; is it the same thing?

Regarding the application of the criminal law, there are implications for oil rigs and other installations in Norwegian waters. It would be helpful to be told what requirements there are and what restrictions the Norwegians, for instance, have and who enforces them. I think your Lordships will be wondering what is the situation regarding a United Kingdom rig or installation in Norwegian waters and vice versa. Under whose law would a Norwegian be subject if he broke the law on a Norwegian installation in United Kingdom waters, or indeed on a United Kingdom installation in our waters? We were considering on Clause 20 some of the problems of the zones around our installations and it would be helpful to know something about the application of the law in respect of installations in the 500 metres area with which they are concerned. Perhaps the Minister could comment also on the application of the criminal law to the UKCS—the United Kingdom continental shelf—in respect of those installations.

I appreciate that those are technical, indeed legal, questions, but we shall be discussing on the next clause the application of civil law, which brings in other aspects of nationality—permits for work and so on—and it would be helpful in matters concerning the criminal law if some of those questions were answered. We have the problems, which are well-known and international, of security and acts which may take place violating the safety of individuals and property and installations in those areas. Doubtless, with the changing basis of off shore operations in the North Sea, particularly around the coast of Scotland, some of the matters which were dealt with in earlier legislation—some of which has been changed or repealed by this Bill—have altered since then. I should like to think that the Government have taken the opportunity of this measure to review that legislation in the light of the changing threats and the application of the criminal law to see that some situations which might be anticipated are dealt with by this legislation. I should also like to be told something about the consultations that have taken place with countries whose territories or waters adjourn ours.

I am sure the Committee would be grateful for information which indicated that in the light of the changing circumstances—some would say threats—affecting life and property in the growing areas about which we are speaking, the Government have considered some of the possibilities. It may well be that the situation will change, possibly radically, in respect of the changing responsibilities in the public and private sectors. It would be helpful to have the Minister's thinking on some of the points I have raised.

The clause alters the existing legislation in two main ways. First, it gets rid of inconsistencies in the present wording of the 1964 and 1971 Acts. In particular, as now amended, these provisions make the powers of constables extend to exactly the same areas on, under and above installations and waters within 500 metres of such installations as the criminal law applies, instead of merely on, under and above the installation itself. That is the power provided to Her Majesty by Order in Council.

Secondly, and more important, it provides for the application of the criminal law and police powers in the foreign sectors of cross-boundary fields. This extension will be effected by the Order in Council procedure, and the orders would be subject to annulment, as provided in Clause 31. The purpose of this is to enable the United Kingdom to fulfil its agreements with the Norwegians to have a common legal and safety regime in the three cross-boundary fields. For that reason Clause 21 extends the application of the criminal law and police powers; Clause 22 extends the application of the civil law; and Clause 23 extends the application of the safety régime.

So under our legal system we will be able to give effect to the agreements with Norway for a common regime so far as these fields are concerned. It has been agreed as a fundamental matter that the fields should be developed as a unit, which is of course good practical sense. Those are the amendments to the law that the clause introduces.

The noble Lord, Lord Bishopston, put some questions to me. The 200-mile limit is not I think relevant for this purpose. The territorial waters limit is the existing limit for territorial waters which, as the noble Lord knows, is up to the three-mile limit. So subsection (4)(a) relates to the three-mile limit. Paragraph (b) of the subsection relates to
waters in any area designated under section 1(7) of the 1964 Act".
These are the waters which overlie the continental shelf. These areas run up to the dividing lines agreed in some cases (Norway and France) and remaining to be agreed in others; for example, with the Republic of Ireland, where there is a degree of difference of opinion about exactly where the boundary lines should be. The provision can also be extended to the foreign sections of cross-boundary fields, and that is the purpose of subsection (5), to which I have already referred.

The matter of consultation that has been referred to has I think already been dealt with in what I have said, in that the purpose of the provisions, so far as the Norwegian fields are concerned, is to enable us to achieve under our law what is presently agreed and wanted.

The provisions make our criminal law apply in all the areas where we could reasonably expect the criminal law to apply. The 500-metres extension is important because matters of criminal law and criminal infringement might take place in a way affecting the installations within the safety zone. It is important that the criminal law should so apply.

So far as consultation is concerned, I should also say, in addition to the underlying agreement to which I have already referred, that the department of my right honourable friend the Secretary of State for
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Energy holds meetings regularly to discuss safety requirements with Government representatives from Norway, as one would, I hope, expect. As part of this co-operation with the Norwegian Government the Government of the United Kingdom have an agreement for the development of cross-boundary fields. Commissions meet at intervals to discuss mutual problems arising in each field.

In recent years conferences have also been held in London and The Hague by North-West European countries to harmonise guidance in respect of offshore activities generally, and it is expected that a conference in Oslo in 1982 will ratify the guidance standards which have been drawn up, all in the interests of securing uniformity in these matters as far as possible. I hope that that explanation is sufficient to answer at least the main questions that the noble Lord asked of me.

I should like to speak to Clause 22 and again briefly raise some questions which might be of concern to the Committee and indeed farther afield. It is advisable that these clauses do not necessarily go through without at least a brief period of discussion. Clause 22, which is concerned with the application of civil law, is probably of wider interest than the other clause, though 1 would not say that that was of no consequence. The application of civil law as contained in the clause is of great consequence to those who work on installations in the waters concerned, and which are detailed in the clause itself.

We are all aware of the extent of the growth of the offshore oil industry, and undoubtedly with the changes anticipated in this legislation, the Government must have considered some of the problems, as well as, I hope, had consultation with the unions, the employers, the industry, and many other people concerned. I hope that the consultations involved not least of all other Government Ministers who are involved in the implications of such legislation.

I think that we can discuss some of the implications of the immigration Acts as they affect the rights of British or foreign citizens who work in the areas of the installations. I believe that there is a significant number of workers not of British nationality who, on account of their experience, arc employed in what is very important and arduous work. If I were to introduce questions regarding the effects of the British Nationality Act 1981 and the status of British citizens as they may be affected—especially those of dependent territories—it might cause some difficulty in getting a reply. So I shall not embark upon that, though the varying nationalities of the people employed is one of the factors concerning this particular clause.

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The issue of work permits is another factor for people who work in the areas and on the installations. One wonders what kind of regulations and checks apply to those who fly out to rigs and work on the installations. We are concerned also with the basis of the work permits, based on nationality, if that is involved, as well as the application of safety and other legislation. The clause involves immigration rules and work permits. Taxation is another aspect which might arise from the application of the clause. I understand that the Public Accounts Committee and the Inland Revenue have been concerned about some aspects of taxation which I do not need to detail to the Minister.

It would be helpful to have some information regarding United Kingdom citizens and non-United Kingdom citizens working within the areas with which we are concerned in the Bill. Perhaps in the answer the Minister will be able to give divers reasons for specifying the categories involved, with some workers on short contracts and others on longer contracts, as well as workers of various nationalities, with permits and certifications being required.

Finally, I should like to ask who is to be responsible for checking on the enforcement of immigration laws. Who is to be responsible for work permits being issued, where applicable, and for ensuring that the tax laws are enforced?—because there have been allegations about tax problems. I should like to know what discussions have taken place with the various countries concerned, and, indeed, with our own Ministries. One can imagine there being discussions with the Department of Employment, the Home Office, the Department of Energy, of course, and those who have to operate our safety legislation, which is of very great importance—and I referred to this only a short while ago in the brief comments I made on the Question, Whether Clause 20 shall stand part of the Bill?

I will not again go into the Burgoyne Report on Offshore Safety, but it is a very considerable report of about 300 pages, and already the Minister has given some indication of the Government's thinking about it. In some ways one would have hoped that there might be a much more fundamental review of the legislation in the light of the Burgoyne Report, because the accidents which have ensued through working in a very dangerous and demanding environment have resulted in serious injuries and fatalities from work involving construction, drilling, diving, cranes and boats. The Minister has made reference to the Government's views on the report, and to what extent they are referred to in legislation which we are considering.

So Clause 22 is of some considerable importance, as I say, affecting the Home Office and, it may be, the Health and Safety Executive or those other authorities responsible for the safety regulations and their enforcement in the area concerned. It may also concern the Chancellor of the Exchequer and, indeed, others, too. Although the clause is a very brief one indeed, it is an important one, and I hope my comments will enable the Minister to give the Committee a little more clarification of the Government's thinking behind the clause, particularly in relation to the changes which are envisaged in this measure.

This clause is not a mechanism for applying United Kingdom statutes generally offshore. That is a matter for the statutes themselves; and if one is asking whether a particular Act applies offshore, then one has to look at the particular Act in order to ascertain that. This clause is a re-enactment, with amendments, of subsections (2) and (3) of Section 3 of the Continental Shelf Act 1964, and the civil law provisions of Section 8 of the Mineral Workings (Offshore Installations) Act 1971, enabling the civil law to be applied in relation to acts or omissions taking place not only in designated areas and territorial waters as at present, but also in tidal waters, the foreign sectors of cross-boundary fields and, in certain circumstances, waters adjacent to the United Kingdom sector but in a foreign sector of the continental shelf. These acts or omissions are defined with reference to activities which are themselves defined in subsection (2). They are similar to those to which it is proposed that the safety provisions of the 1971 Act will apply. So in order to attract the civil law provisions of this clause, the acts or omissions require to be related to the activities which are set out in subsection (2) of the clause. The Order in Council procedure, which was used under Section 3(2), is of course retained.

I have been asked a number of questions about a variety of matters relating to the offshore regime. First of all, perhaps I could take the Burgoyne Report, because I have referred to that already. In the main the Burgoyne Report was concerned with fairly technical matters which, I think, would properly be the subject of regulations. I have mentioned already that so far as primary legislation is concerned the first necessity has been met in this Bill. The second one is really more complicated than we could meet here; but the regulations which may be made under the primary legislation, of course, are matters for consideration in the light of the Burgoyne Report.

So far as the Health and Safety Executive is concerned, the statute under which it operates contains a good number of criminal provisions and, of course, they will be affected by the clause to which we have already referred. So far as concerns some of the Acts to which the noble Lord, Lord Bishopston, referred, 1 think I am right in saying that the Immigration Act does not have a provision for offshore application, and, therefore, this clause has no effect on that provision.

The real object of the provisions which are amended in this clause is to make available the remedies of civil law, mainly for breach of contract or tort or delict, for persons working on the installations. So far as taxation is concerned, all United Kingdom and Norwegian residents employed in the United Kingdom continental shelf are liable to pay United Kingdom tax. Some non-residents of our country from countries with which the United Kingdom has double taxation agreements are not liable, but those workers are taxed under the terms of the appropriate agreements. I think that so far as consultation, and so on, is concerned, I have already referred to that under the earlier clause. I hope I have answered at least the main points that the noble Lord raised on this clause.

This is Clause 22, and I gather that the Lord Advocate suggested that this
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was an amendment of some previous Act. Would it not be wise to say so? There is no indication of that, reading this clause; in fact, there is no reference, as I see it, to any other Act of Parliament at all. If this is purely, as he says, an amendment of another Act, would it not be far better to say so?

It is always a question of what is the most convenient arrangement for legislation. The form of Clause 22 is to re-enact, with amendments, subsections (2) and (3) of Section 3 of the Continental Shelf Act 1964. Accordingly, it does not have to bear to be an amendment, because you are substituting the new provision for the original provision. That, therefore, is a situation in which it is not necessary expressly to amend; and I think I have heard noble Lords here express difficulty in trying to read two provisions together, the original provision plus the amendment. In this case we have tried to make it easier by putting the whole provision together anew; and, of course, the noble Lord will have noticed, I am sure, that in Clause 21(8) he is told that Section 3 of the 1964 Act ceases to have effect because it is superseded by Clause 21 and Clause 22. So he is told that the matter of the earlier provision is superseded, and it is made as easy as we can make it for him by putting the whole thing in, including the amendments, so that he can read the whole thing at once.

Yes, I know we get that in relation to the 1964 Act, but I thought the noble and learned Lord referred to yet another Act. He referred to two Acts. This is where it is confusing, because somewhere else in the schedule there will be, in reference to these Acts that he has mentioned, something saying, "Leave out or repeal this section, that section or some other section". I think there should be an indication there, as indeed there is in the next clause that we are coming to, Clause 23, where it says:
… there shall be substituted the following section".
We get it there. We know that it is within the clause where the substitution is being made. There is no reference at all in this clause, Clause 22, to any other Act of Parliament. I think that that is very bad from the point of view of anyone reading the statute.

If I may start on Clause 23, this is a clause which extends the application of the Mineral Workings (Offshore Installations) Act 1971, the so-called 1971 Act, which makes provision for the safety of persons working on installations concerned with underwater workings on mineral resources. It refers to gas storage installations and to the provision of accommodation of workers concerned with the installations themselves. Therefore, it is an important clause. The clause reads at the start:
This Act shall apply to any activity mentioned in subsection (2) below which is carried on from or by means of an installation which is maintained in the water, or on the foreshore or other land
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intermittently covered with water, and is not connected with dry land by a permanent structure providing access at all times and for all purposes".
Subsection (2), to which reference is made, gives the extent of the activities covered by the clause. It includes the exploitation and exploration of mineral resources in or under the shore or bed of controlled waters; the storage of gas, the conveyance of things by pipes and systems of pipes placed in or under the shore or bed of controlled waters, and a new factor, the provision of accommodation for persons working on installations.

I read out the various aspects of Clause 23(2) because they show the variety of the considerations which surely have been looked at in this particular measure and in this clause. Concern has been expressed also about the transfer of workers to and from the installations, and we have known in recent times of the problems involved, in that, with helicopters and other means of transport by air, land and sea and the various methods of transport, many of them new, for new situations, some thought is needed in order to anticipate what changes are coming about. I have made reference already to the dangers of people working in these areas and it is proper that the Committee should have some regard to the situations that they face, many of them new.

I should like to ask the Minister whether the clause as it stands covers transfers of people or people joining or leaving the installations. I have raised this before. What safety regulations apply? What authority is responsible for safety checks and the enforcement? Another aspect to which I would draw attention covers accommodation, safety and standards. This is mentioned in subsection (2)(d), which refers to the provision of accommodation for persons working on an installation which is or has been maintained or intended to be established for carrying on an activity falling within previous paragraphs. This is one of some importance.

The matter is of wider concern to oil companies and to those involved in the working of installations and to the personnel involved who not only have to be transported but also accommodated. It would be helpful to know something about the requirements of safety in relation to the installation and the servicing of the accommodation which has been known as "flotels". I should like to ask what are the requirements not only for safety but for the general health of the people concerned, who are sometimes working in conditions which are far from natural or normal. The shape of these flotels and the technical requirements may impede health and comfort. The flotels are quite different in several respects from many other installations. They are basically mobile marine vessels subject to United Kingdom and international marine regulations, I would anticipate. Secondly, they are not hydrocarbon-bearing structures and therefore do not require the same type of fire, gas, leakage and explosion protection systems.

These are factors which have already engaged the notice of the Government in Standing Committee in the other place on this clause. Mr Hamish Gray, the Minister of State, said that it would be unacceptable that workers housed on accommodation units should not have the same degree of protection as when on
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drilling and production platforms. The noble Earl, Lord Mansfield, who introduced the Bill here, has already reported this. While we do not dispute the argument, we would probably disagree with the implicit assumption that the level of risk is comparable. It is difficult in these situations to compare the circumstances of people working in accommodation which has been known, established and accepted over many years and the new situation which concerns those who operate and are involved in flotels, who live in circumstances which must be adapted and are still being adapted through a wide range of changes in the functions for which they are there—diving, maintenance, and so on, and changing location from time to time.

It would be helpful if the Minister were to enlarge on that aspect. The other question which must arise from the new circumstances is to what extent they are checked and who has the authority for enforcing the regulations. Another aspect is that concerning training, which is most important. Those concerned must be kept up to date and aware of the changing needs of their own arduous occupation. I should like to ask the Minister what consultative arrangements there are with the trade unions concerned in respect of those employed to ensure the safety and well-being of the men, and, I presume, women, who work under dangerous and arduous circumstances. I should like to know what consultation the Minister has had with them. I could go into greater detail, but I shall not do so because I anticipate that other noble Lords may wish to raise questions on some of these important points.

As I said on earlier clause stand part Motions, we are concerned now with changing circumstances caused by scientific and technical innovation and it is important that legislation now being drafted and passed should take all these factors into account.

We on these Benches have a slightly different approach from Lord Bishopston's and it goes somewhat deeper. The concern expressed to us by both the oil and shipbuilding industries on the implications of Clause 23 is slightly different. It is about the extended meaning of the term "offshore installation". These industries are worried that this meaning has been extended too far. In the Bill there is the rubric to Clause 23:
Extended meaning of 'offshore installation'.
An oil rig is considered to be an installation, whereas the flotels mentioned by the noble Lord, Lord Bishops-ton, are much more akin to a ship in the sense that they have free movement and are almost indistinguishable from a ship.

While accepting that there is a case for the registration of mobile accommodation—or flotels as they are called—and for legislation to extend the powers of the Government over the flotels working on the United Kingdom continental shelf, we are concerned that this should not be done by simply extending to flotels the existing regulations which apply to other offshore installations. There is a clear difference in these so-called flotels from offshore installations in three fundamental respects: first, they are basically mobile
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marine vessels, although sometimes a rather odd shape. Secondly, they are not hydrocarbon-bearing areas; thirdly, they are not limited to a single use.

Being essentially marine vessels, flotels are subject to United Kingdom and international marine regulations like any other ship. A cruise liner is a kind of flotel. This will continue to be the case after the enactment of this Bill. There is a danger therefore that the regulations under the Mineral Workings (Offshore Installations) Act, to which the noble Lord, Lord Bishopston, referred and is referred to in Clause 23, and existing marine regulations will overlap. In some cases they may actually contradict one another.

We feel that this could result in a confusion of applications during operation; it could cause greater and unnecessary expense to operators and legal difficulties for both the Government and operators. As non-hydrocarbon-bearing areas there is little justification for applying to flotels the quite properly stringent standards of safety in regard to fire, gas leakage, explosion risks and so on as presently applied to fixed installations.

When the noble and learned Lord replies he should try to distinguish between the need for making a distinction between a flotel and a fixed installation or why there is a need to lump them together. Is this a technical need that involves the safety of the people on board flotels, or is it merely a convenience for the Bill not to have to go and redraft special regulations for special situations which surround flotels?

A further reason why regulations in regard to flotels need to be flexible is the very wide range of use to which they are put. They are not only put to merely accommodate oil rig personnel, but they are used for diving, maintenance, medical or flying services and often a combination of these. It would be a serious blow to the United Kingdom oil and construction industry if United Kingdom registered hotels were made less attractive commercially by being subject to regulations which reduced the range of uses to which they could be put and the areas of the world to which they operate. This has particular implications for employment.

Although this may be a technical clause and maybe these questions appear on the surface to be technical questions, there are far wider implications in making a distinction between a fixed installation or oil rig and a flotel. I am not convinced that the answers given during the Committee stage in another place answer the questions that I have raised. It occurs to me that if the industry still continues to ask these questions it means that the industries concerned are also not satisfied that there should be no distinction between a fixed installation and a flotel.

Anything that the noble and learned Lord may say will assist the industry. If this distinction is not going to be made later on in the Bill, will he be able to put up a case to the industry—this is a purely nonpolitical point—as to why the extra operating and construction expenses are therefore going to be necessary for future flotels, and also necessary for existing flotels which are perfectly legal at this stage but will have a difficulty after this Bill is made law? I look forward to hearing what the noble and learned Lord
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says on a matter of fairly wide principle, the attitude taken to this clause in this Bill.

From the two speeches that we have had we get a fair indication of the complexity of what is being done and the consequences of what is being done. I am going to make a simple drafting point. Clause 23(1) says: "Application Act". This is the Mineral Workings (Offshore Installations) Act, not this Bill. It says:
This Act shall apply to any activity … which is carried on … by means of an installation … in the water, or on the foreshore or other land".
The words I am interested in are:
in the water, or on the foreshore".
Now we go to subsection (2):
The activities referred to in subsection (1) above are—(a) the exploitation or exploration of mineral resources in or under the shore or bed".
How does that phrase link up with the previous phrase? Instead of, as in the first case:
on the foreshore",
it is:
in or under the shore".
What is the difference? I thought in Scottish terms there was a difference between the shore and the foreshore, especially in respect of ownership. Why should it be,
on the foreshore",
and,
in or under the shore"?
Quite frankly, it is a phrase that I have never heard before.

I hate to complicate the matter any further by going on to the question of controlled waters, because "controlled waters" is extendable under subsection (3) of the substitution. It makes my mind boggle about getting foreshores of controlled tidal waters and parts of the sea in or adjacent to the United Kingdom, or to the seaward limits of territorial waters, or waters in any area designated under Section (1)(7) of the Continental Shelf Act. I do not think there are many shores around that.

The simple point is: Why does it say "on the foreshore" in one case, and then "in or under the shore" in the other? Why the change from "on" to "in" and from "foreshore" to "shore"? Is there any difference?

I am not sure whether I should take the questions that I have been asked in order of importance or in the order in which they came —if these are different. This clause deals with the fourth main subject of Part IV—that is, the safety regime. Section 1 of the Mineral Workings (Offshore Installations) Act 1971 defines the operations and offshore installations to which the safety régime set up under that Act applies. Section 44 of the Petroleum and Submarine Pipe-lines Act 1975 then extended the application of the 1971 Act to certain installations connected with undersea pipe-lines.

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So the clause with which we are concerned here is dealing with the operations and installations to which the safety regime set up under the Mineral Workings (Offshore) Installations Act should apply. That regime is in its nature a typical one which depends to a great extent on regulations made under that primary legislation. There are provisions under that legislation for consultation with the unions and the operators before these detailed regulations are made, in order that their interests and all their expertise can be brought into account in making the regulations.

When the regulations are made, they take account of the subject matter to which they apply, and the mere fact that the flotels are brought under the scope of the primary legislation does not necessarily mean that the regulations which will apply to flotels will be exactly the same in every particular as the regulations which apply to other installations to which the primary legislation may apply. I think it is also the fact that the marine provisions will apply to those flotels only when they are in motion. Certainly I see no reason to suppose that regulations cannot be made under the 1971 Act, which will take proper account of the character of these flotels and will reduce to a minimum, if not eliminate, any overlap between the régime which applies to them as marine vessels when they are in motion and the régimes that apply to them when they are installations serving a hydrocarbon interest when they come to their station.

Recent development in the North Sea has shown the need to extend the categories of offshore installations to which the 1971 Act applies, and the purpose of this provision is to make the extensions which experience has shown seem to be required. The first is to cover the undersea storage of gas; the second to ensure that the Act applies to accommodation platforms, flotels; the third to ensure that the 1971 Act applies to platforms in the course of dismantlement; and the fourth to enable the 1971 Act to be applied by Order in Council to installations in the foreign sectors of cross-boundary fields, in order to implement our agreements with the Norwegians, to which I have already referred, in this case in so far as they relate to safety. Fifthly, they are to ensure that installations on our continental shelf or on the foreign sectors of cross-boundary fields can by Order in Council be made subject to the 1971 Act, notwithstanding that the mineral resources in relation to which they are being used lie outside these areas. We could have an installation being used to extract minerals from an area which is outside the United Kingdom continental shelf but which it is highly desirable should be subject to the safety régime. Accordingly, I would believe that the provisions take proper account of the considerations to which the noble Lord, Lord Tanlaw, referred, and that it would be wrong to suppose that the regulations themselves cannot readily distinguish between the various subjects to which the primary legislation may refer.

I think I have dealt with the main matters raised by the noble Lord, Lord Bishopston. The regulations are capable, under the 1971 Act, of making provision for all the matters which concern the safety of those who work on these installations in the definition as extended by this provision.

Now if I may turn to the drafting points, I think that the part of subsection (1) of the new clause to
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which the noble Lord, Lord Ross, first referred, relates to the installation. It is the installation which is maintained in the water or on the foreshore, or on land intermittently covered with water, and is not connected with dry land by a permanent structure providing access at all times and for all purposes. So it is an offshore installation in the sense that it is not connected with the dry land, but it may be either in the water, on the foreshore or on land intermittently covered by water. That is the installation; but, the activities which are carried on from the installation are the exploitation or exploration of mineral resources in or under the shore or bed of controlled waters; and of course it is true that not all the controlled waters have a shore, in the sense to which we are referring. But this is intended to make as wide an application as necessary to ensure that all the offshore installations where the safety of workpeople is important are properly capable of being covered by the regulations.

Accordingly, it is right that controlled waters should be widely defined and, in particular, that they should include reference to waters in a foreign sector of the continental shelf which are adjacent to our own waters so that, for example, the cross-boundary fields, as I said earlier, can be subject to a safety regime which applies to the whole field and thus the safety provisions do not suddenly break, as it were, because you have come to what for this purpose is an irrelevant national boundary. I hope that in the light of these explanations your Lordships will feel able to allow Clause 23 to stand part of the Bill.

I am grateful to the noble and learned Lord for his detailed reply, which I am sure will give some assurance and more information to all concerned. As he will know, the oil companies and others involved in North Sea oil work and installations, especially those concerned with accommodation, spend large sums of money to maintain as high a standard as possible for their workers, and of course they have compiled codes of practice through the United Kingdom arrangements and have also accident prevention and safety awareness programmes for detailed examination of accident records and so on.

I think the Minister's comments regarding the flotels in relation to other marine installations will be helpful. As he knows, Clause 23 extends the definition of the offshore installation to cover floating accommodation vessels, or flotels, as we have called them. That is causing some concern and, as the Minister accepts, they differ from other installations. This cannot be done simply by extending to flotels the regulations applying to other offshore installations; and the Minister has made that point. In view of the similarities between flotels and other marine vessels, and the fact that they are not subject to the same risks as hydrocarbon-bearing installations, many of the firms concerned believe the proposed regulations would be better based on the existing modern safety regulations. I believe that that point was partly covered by what the Minister said, with some changes to take into account the nature of flotels themselves. In thanking the Minister for his comments, I would urge him—probably, quite unnecessarily—that there should be the
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closest consultation between all those concerned with the provision of accommodation, and also with the workers and the unions concerned.

First, why only Scotland? I presume that this clause applies only to Scotland. This is a very important change. Section 1 of the 1975 Act gave power to the Secretary of State to,
acquire by agreement or compulsorily any land in Scotland for any purpose relating to exploration for or exploitation of offshore petroleum".
That was the original purpose. We now have to add these other words:
or the storage of gas in or under the sea bed or the recovery of gas so stored".
Does that mean that the powers already exist for England and Wales, or that the only land that it is to be acquired in relation to this principle will be in Scotland? I would not complain, but I doubt whether it is. So there is a gap somewhere.

The first purpose of the Offshore Petroleum Development (Scotland) Act was to acquire land by agreement or compulsorily. Then, it specified the purposes. I do not think for a minute that we are going to acquire land compulsorily for storage—or are we?—although I did not get the explanation that I hoped for in relation to the definitions of "foreshore" and "shore", because it may well be that we shall have compulsorily to acquire a bit of the foreshore or the shore.

I see an English noble Lord shaking his head. The rights of the Crown in respect of foreshores can be set aside, if a claim is made and is not met within, I think, seven years. That is what it used to be. Indeed, we discovered that on certain islands of Scotland, which will not be unfamiliar to Members of your Lordships' House, the owners in question just took over all those rights. It is possible that what used to be the rights of the people may have to be bought back, because of the neglect of the past. However, I do not think there is much in that. But the purposes include sites or facilities for the construction of pipe-lines or associated apparatus or works in connection with the exploitation and exploration of petroleum and with shore terminals. I should have
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thought that the whole of the Conservative Benches would have been full, with noble Lords complaining about giving additional powers to the Secretary of State for Scotland to acquire land compulsorily. That is the power that we are giving.

To come to a small point, which is not unrelated to my last one, subsection (1)(a) refers to,
the storage of gas in or under the sea bed".
I do not know whether the noble and learned Lord the Lord Advocate realised it—he can check it in Hansard—but in his last speech on Clause 23 he referred to the undersea storage of gas. There is no such thing as the undersea storage of gas. The storage of gas is to be in or under the seabed. As a simple layman, I should have thought that it might have been on the seabed, or under the seabed, and I do not understand why those who drafted these extended powers did not use the phrase that was already there,
for use in or under the sea".
The storage of gas in or under the sea would have met this point and could have made the drafting a great deal easier.

I should be grateful for the reflections of the noble and learned Lord the Lord Advocate, lucid as ever, on this point, particularly as to why we in Scotland need this power. Is this power already there in respect of England? Or are we going to have another Bill to deal with it? It may be, of course, that there is another clause in the Bill which I have not spotted that gives this power to the Secretary of State for the Environment.

As the noble Lord, Lord Ross of Marnock, has said, we are now dealing with one of his "children"—and I shall try to do so as tenderly as I can. The Offshore Petroleum Development (Scotland) Act 1975 refers, as its name indicates, only to Scotland. There are no similar powers for England and Wales, either existing or proposed, in this particular Bill. But, in view of the developments in techniques offshore, it was thought right, as a natural development of the purposes of the Act which the noble Lord introduced, to extend the provisions so that the Secretary of State will have identical powers so far as purposes relating to offshore gas storage are concerned as he has at the moment for offshore petroleum development. It is as simple as that.

The noble Lord has suggested improvements in the drafting. I shall be happy to consider whether these would constitute improvements. What is under the seabed is probably also under the sea, but the drafting points which the noble Lord has suggested are certainly matters—

I appreciate that "under the seabed" is under the sea, so why change it? That is already contained in the original Act. What the Government are doing is distorting this and thinking up new ideas which do not lead to clarification of the law but rather to its obfuscation.

It may well be that the noble and learned Lord does not have the information, but it seems to me to be so important and so valuable a piece of legislation that it has got to be extended to cover the storage of gas. May I ask whether the power contained in the 1975 Act has been used?

§Lord Mackay of Clashfern moved Amendment No. 38:
Page 32, line 33, leave out ("section 8(4) of the 1971 Act") and insert ("paragraph 6(5) of Part III of Schedule 13 to the Civil Aviation Act 1982").

§
The noble and learned Lord said: This amendment, and the amendment immediately following, are drafting amendments to take account of the consolidation presently taking place of the Civil Aviation Acts. I beg to move.

§Lord Mackay of Clashfern moved Amendment No. 39:
Page 33, line 7, leave out from ("by virtue of") to end of line 10 and insert ("paragraph 6(5) of Part III of Schedule 13 to the Civil Aviation Act 1982, that Act or any enactment to be construed as one with that Act.").

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The noble and learned Lord said: The explanation is the same for Amendment No. 39 as for the previous amendment. I beg to move.

§Lord Lovell-Davis moved Amendment No. 44:
Page 35, line 37, leave out from ("shall") to ("House") in line 38 and insert ("be laid in draft before Parliament and approved by an affirmative resolution of each.").

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The noble Lord said: In putting forward this amendment I intend to return to the fundamental constitutional point which I and other noble Lords raised on Second Reading and have raised during this Committee stage: the quite unreasonable powers that this Bill would have Parliament hand over to the Secretary of State.

§
Almost exactly six years ago during the Committee stage of the Labour Government's Energy Bill when I was the Minister responsible for its passage through this House, the noble Lord, Lord Strathcona and Mount Royal, whom I am sorry to see is not in his place tonight, speaking for the Tory Party in Opposition said:
If we are to give Governments a great deal of power to which we object in principle, we should like to know what those powers are and to be sure that there is Parliamentary control over those powers".

§
We were not at that time talking about selling-off the nation's assets but about emergency powers exercised in the nation's interests. I believe that the people at large accept the need for special powers to deal with exceptional circumstances and crises, but I do not believe that they will or should freely give a government and Whitehall the right to deal with their own property without any recourse to their own parliamentary representatives. To do so would make a mockery of their democratic rights. But that is what the Government intend to do with this Bill.

§
In addressing the noble Lord the Minister, and in particular his noble friends, on what might seem to them to be simply another Bill for which the Government call for their unquestioning support, let me remind them of a pledge which the Conservative Party made to the electorate and on which they won the general election in 1979.

The Conservative Party manifesto said:
We will see that Parliament, and no other body, stands at the centre of the nation's life and decisions, and we will seek to make it effective in its job of controlling the Executive".
That part of the manifesto is ironically entitled, The Supremacy of Parliament. This Bill seeks to do no such thing. On the contrary, under Clauses 3(1) and 11(1) the Secretary of State alone can direct BNOC and the British Gas Corporation to dispose of assets. Under Section 3(2) and 11(2) he can, by an order subject to a negative resolution, provide that the 1975 and the 1972 Act shall apply to the subsidiary with such modifications as he may specify. Having given a direction or made an order, the corporation is required to comply with it, as it states in Clause 31,
(notwithstanding any duty imposed on it by or under any enactment)".
The Secretary of State can give a direction to BNOC without referring the matter to Parliament at all. As the Bill stands, he can even dispose of the British Gas Corporation's distribution and transmission system simply with an order subject to negative resolution. Is this the Government's interpretation of Parliament standing "at the centre of the nation's life and decisions"? These are major decisions that we are talking about which vitally affect the nation's life. They are not on the one hand emergency powers or, on the other hand, trivialities. They are vitally important decisions. Do we really want to extend to these vast state corporations the kind of procedure that applied in the case of Amersham International? I do not want to harp on it, but in that case none of the serious decisions about launching the issue, the articles of association, the prospectus, or the nature of the valuation, was brought before Parliament. As a result, very large underwriting fees were paid for an issue that was 20 times over-subscribed and where 25 million shares changed hands on the first day they were quoted. Is that the precedent that the Government wish to follow here? Surely the public expect—and we should ensure on their behalf—that Parliament has the responsibility to scrutinise such disposals. Parliament should examine the terms and also, of particular
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importance in the case of gas, the nature and consequences of the disposal.

It is immaterial whether or not the Government say that they have no intention at present of disposing of the transmission and distribution system or of anything else. The plain and disquieting fact is that the powers to do so are there, and one must assume that the Government have in mind to privatise the systems, since they have consistently set their face against all proposals to limit the powers of the Secretary of State. The noble and learned Lord, Lord Wilson of Langside, has withdrawn Amendment No. 41, but the matter is relevant to this amendment. Why is there no reference to Clause 3(1) in Clause 31? At least, Clause 11(1), in relation to gas disposal, provides for a negative resolution—not of itself effective control—but the creation of a new Britoil company will not be the subject of any parliamentary scrutiny.

If the Bill remains as it is, and these far-reaching decisions are made and implemented solely by Ministers and their officials, in private and without reference to Parliament, it will be an affront to parliamentary accountability and an abdication of an essential responsibility which should be assumed by any democratic Government. I hope, therefore, that when the noble Lord the Minister comes to reply he will accept that the concern which has been expressed on this side of your Lordships' Committee springs not from party political considerations but from reflection on the fundamental constitutional implications of Clause 31. This amendment is designed to make this Bill a better Bill by ensuring that it gives Parliament the chance to know about and approve the Secretary of State's actions. I beg to move.

Before I begin to provide some sort of answer to the noble Lord, Lord Lovell-Davis, he opened his speech by referring to remarks made by my noble friend Lord Strathcona and Mount Royal when sitting on the other side of the House when the noble Lord, Lord Lovell-Davis, was on the Front Bench on this side. Can he further enlighten us and tell us what happened as a result of that speech? Did the Opposition defeat the Government and change the clause in question?

If the noble Lord will give way, I can give him an answer to that immediately. Before I do so, I should like to quote almost the last words the noble Lord, Lord Strathcona and Mount Royal, speaking for the party opposite, said:
We are rather nervous about giving Governments blanket powers, and I think it is a good healthy Parliamentary attitude to continue to maintain that stand".
After that he withdrew the amendment.

I must say I entirely agree in principle with the noble Lord, Lord Lovell-Davis, when one is restricting the powers of Labour Governments,
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because on the whole Labour Governments impose controls on people and on the whole Governments from this side of the House release people. It is a matter of direction. So on the whole it makes sense when we are on that side to make speeches like that. But your Lordships will note that my noble friend did not press the matter to a Division, and I hope that the noble Lord, Lord Lovell-Davis, will take the same hint when it comes to the end of discussion on his amendment.

I think it is a great pity that this amendment moved by the noble Lord, Lord Lovell-Davis, should have come so late at night. I hope that the Minister who will reply will, in spite of the good-humoured observations of the noble Lord opposite, realise that there is in fact behind the thinking of those of us who most strongly support this amendment no party political thinking at all. It does raise a question of fundamental constitutional importance—the question of the control of the executive by Parliament, a matter on which I should have thought all noble Lords opposite felt most strongly, whether their party was in power in Government or not.

I do hope that the Minister will take this very seriously, and, if he is not prepared to concede that it must be looked at again and some amendment effected giving parliamentary control over the powers of the Secretary of State, then certainly there are many of us on this side of the Committee who will wish to raise the matter again. It was simply because of the lateness of the hour that I dropped those amendments which stood in the name of my noble friend Lord Whaddon and myself. Someone in the other place, in the course, I think, of the Second Reading debate, said that the Bill enabled the Secretary of State to do anything he liked. That just about sums it up literally and quite accurately—he can do anything he likes. Are the Government really suggesting that this is appropriate?

Let me mention some of the things that the Bill does. First, it empowers the Secretary of State completely to dismantle the two undertakings. Secondly, it gives the Secretary of State the power already referred to by the noble Lord, Lord Lovell-Davies—but I make no apology for repeating it because I think that it is a quite extraordinary, although perhaps not unprecedented, constitutional intrusion—to give directions notwithstanding any duty imposed by any enactment. It is quite extraordinary. Have Ministers really thought about the implications of this? Thirdly—and I shall mention only three matters because it is so very late—it gives to the Secretary of State control of the development of the transmission system so far as the British Gas Corporation is concerned and provides that the development of that system will pass from the British Gas Corporation to the Secretary of State. This is a significant and radical departure from the existing system, and it leaves—and this was remarked upon by myself and others on Second Reading—the British Gas Corporation responsible for the safe and efficient operation of the system but gives to the Secretary of State the power to develop it.

Surely the Government can appreciate that, whatever jokes we may make about our silly party games—and we can laugh at them especially at this time of night, and I have spent as much time as anyone else laughing
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at them—the position on this Bill goes far beyond that sort of thing and is far more fundamental. My recollection is that some excuse was sought in the provisions of the 1975 Act. All I would say about that is that the two situations seem to me, in my, of course, very fallible judgment, to be quite different.

Before the noble Lord sits down, it would help me if he would indicate whether, in fact, he was speaking to Amendments Nos. 45, 46 and 47, because he seemed to be verging on doing so and I want to know whether to refer to those amendments in my own remarks.

I certainly had Amendment No. 46 very much in mind, but not Amendment No. 45. However, as I have said, if the Government show no sympathy to the arguments which the noble Lord, Lord Lovell-Davis, has presented in support of the amendment, we may have to raise all these matters again, as I think we would be able to do at a later stage. I am sorry about this. As the noble Earl knows, I am like the noble Lord, Lord Ross of Marnock—just a simple Scotsman. I did not realise that I had said anything that would upset him. I always seem to be upsetting him and I really wish that I did not do so.

Very briefly, I should like to speak in support of this important amendment. Perhaps I may reassure the noble Lord opposite about the nonparty element of giving extra power to the Secretary of State. Our main contention has been the weakness of the Bill in overburdening the Secretary of State with unnecessary powers. I believe that the matter should from time to time come back to Parliament to check that those powers are not being abused or taken too far. By that I mean simply that, whether the Government of the day be from either side of the Committee, if the department concerned wished to use this Bill as an empire-building exercise in departmental terms, there must be an opportunity for Parliament at least to restrain it from so doing.

One of the fears that I have had and have expressed in a number of amendments moved during the course of this Bill, is about the extra numbers involved, with the extra powers being given to the Secretary of State. Perhaps it is for this reason above all that I support the noble Lord, Lord Lovell-Davis, in moving this amendment, apart from any other matters of general principle which have already been discussed and argued from these Benches.

When we disentangle the rhetoric and the hyperbole from the argument, this amendment comes down to the fact that the noble Lord, Lord Lovell-Davis, is seeking to turn what I might call the negative procedure into an affirmative procedure. So there is no question about giving any more powers to the Secretary of State or, indeed, of fettering the powers of the Secretary of State. All this amendment seeks to do is to impose a different form of parliamentary scrutiny upon the Bill.

When people talk about party political considerations, it is difficult not to view such claims with a fair degree of cynicism, because a great many of us have sat on
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both sides of the Committee. I am not sure whether the noble and learned Lord, Lord Wilson of Langside, has previously sat where he is now sitting, but some of us have and these claims are made with great passion and sincerity by Oppositions. Of course, the Liberals are always in opposition so they are quite used to making them. I do not say that cynically, but I think that one has to treat the matter with a fair degree of logic rather than emotion.

It is most unfortunate that the noble Earl, Lord Mansfield, brings in these expressions, because I was listening with great attention to what he was saying. If he wants to score cheap party political points at this time of night in the course of this Bill, he will get plenty in return. I hope that he will not make these asides, as he continues to give us what I hope is an informative, helpful and instructive side to this Bill. If he wishes to continue in this vein, we can certainly make life a little more difficult than we have hitherto. We have been trying to assist him.

I will deal with one interruption at a time, if I may. I am always ready to listen to lectures from the noble Lord, Lord Tanlaw. I have not mentioned anyone's manifesto or undertakings of that nature; neither do I intend to refer to any noble Lord, particularly without giving him notice; nor will 1 make any false points. No doubt the Committee will listen to what I have to say and judge it accordingly. Now, of course, I give way to the noble and learned Lord, Lord Wilson of Langside.

The noble Earl said that he would answer with logic rather than emotion. Did he seriously think that he was treated more to emotion than to logic related to constitutional principle from this side of the Committee? Did he really think that?—because I find it interesting if he did.

Let us both read Hansard and meet tomorrow in the Bishops' Bar. If I may, I shall return to the argument. I appreciate that noble Lords opposite object to the powers of disposal which we are taking in this Bill. We have debated these policy issues during the passage of the Bill and we are doing so now. I accept that these debates are necessary. I go further than that and say that they are desirable. Bearing in mind the fact that we have already debated this—although the noble Lord, Lord Lovell-Davis, may not appreciate it—in Amendment No. 5, we debated it at very considerable length, we had a Division and the Committee has already pronounced upon this very point. But I make no complaint because it is an important point and we can return to it again, and no doubt may well do so in the future.

Is it really reasonable to ask, as noble Lords opposite apparently seek to do, that every order or direction specified in Clause 31(2) which is going to be exercisable by statutory instrument in this Bill should be subject to the affirmative procedure? I would submit to the Committee in all seriousness that this is scarcely a balanced approach. Let us just consider what is going to be subject to the negative resolution procedure
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under the Bill as it stands. In other words, let us just examine the various provisions which would provide an opportunity for debate if either House so wished.

First, there would be any statutory instrument containing an order in council—and this applies, for example, to the application of criminal and civil law in Clauses 21 and 22 which we discussed not long ago; secondly, orders under Clause 3(2) by which Part I of the Petroleum and Submarine Pipe-lines Act 1975 could be modified in its application to Britoil; thirdly, directions under Clause 11(1) to the British Gas Corporation to exercise its powers under Clauses 9 and 10; fourthly, orders under Clause 11(2) by which the Gas Act 1972 can be modified in its application to a relevant subsidiary of the British Gas Corporation; and, fifthly, orders under Clause 11(4) by which shares in a relevant subsidiary of the British Gas Corporation can be transferred to the Secretary of State. Therefore, is it seriously suggested that every order under any of these five headings which I have set out should be subject to affirmative procedure?

The noble Lord, Lord Lovell-Davis, asks me why it is that the provisions in, for instance, Clause 3(4) arc not made subject even to the negative procedure. We had a long debate on this topic, but, for his benefit, I explained to the Committee, and it was accepted on a Division if not on the argument, that the way in which shares in Britoil are going to be floated off into the possession of the Secretary of State and sold off by him has been discussed, I will not say ad nauseam, because that is offensive, but very fully by both Houses of Parliament, and this is now a policy decision.

We have made it abundantly clear, time and again, that my right honourable friend is going to take over the shares and sell them. I have also stated that there comes a time when all the issues have been thoroughly ventilated and debated when the Government must get ahead and take executive action. I have also explained that an extra layer of parliamentary scrutiny regarding the preparation of a flotation of this nature, which is going to be complex and where time is going to be of the essence could, in effect, be ruined if, for instance, Parliament was not sitting for something like three months while the order was laid. For all those reasons, we excluded Clause 3(4) from this section.

I really do not want to score points in spite of what the noble Lord, Lord Tanlaw, has accused me of in advance. We have looked at other provisions just to see. May I quite quickly mention that the relevant sections of the British Telecommunications Act 1981 are not subject to either the affirmative or the negative resolution procedure. In the Transport Act 1981, directions by the Secretary of State concerning disposals are not subject to any parliamentary procedure, whereas under Clause 31 of this Bill similar directions to the British Gas Corporation are.

I take issue with the word "dissipation"; they are examples of executive action
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following the passing of an Act. I was going on to two other Acts which will be very familiar to the noble Lord, Lord Beswick. The Employment Protection Act 1975 provided for all orders, rules or regulations under the Act to be subject to the negative procedure only; that was under Section 123. Coming closer home so far as he is concerned, the powers in Section 1 of the Aircraft and Shipbuilding Industries Act 1977 which established British Aerospace and British Shipbuilders were also exercisable by statutory instrument subject to the negative procedure alone.

I have to say, therefore, that, if that procedure commended itself to the last Government—when we, in opposition (treading carefully, as I am sure noble Lords opposite appreciate we always do) either did not force Divisions or, in other words, bowed to the will of the elected House along the corridor—then I submit that on the argument as I have set it out, and on perfectly respectable precedent, it is right that the powers as set out in the Bill should be regulated in exactly the same way by Clause 31. I am afraid it is a matter of disposition and philosophy, but I hope I have shown that whatever the motivation of noble Lords opposite on the amendment, it would not be sensible to write it into the Bill.

We could go on debating this subject through the night. We all recognise that we are custodians of democracy. I do not believe this is a party matter because deep down all of us, in all parts of the Chamber, care for parliamentary democracy and all that that means in terms of accountability and so on. It has been said that the price of democracy is eternal vigilance. After a long day's constructive and responsible debate, I am not sure the powers of vigilance are all they might be now compared with what they were earlier in the day.

We are dealing with what I think all noble Lords accept is a matter of great importance. The Minister indicated that he had done some homework in looking at precedents and so on, and I hope he will follow up that work between now and Report by seeing whether some of the expressions of concern which have been voiced by noble Lords on this side of the Committee, and which I am sure actuate noble Lords behind him, can be looked at again. I would like to think that the noble Earl agrees that it is a matter which needs further examination and perhaps another debate on Report. It would be helpful if he would give some indication that he is prepared to do that, so that we might withdraw the amendment on this occasion, maybe returning to the matter later, so benefiting from further thinking which the Minister may be prepared to give the matter.

I hope I am as honest at this Dispatch Box as in the other place. Of course I will give the matter more thought, but it is a matter of considerable importance and it really would be dishonest if I held out much hope to the noble Lord, Lord Bishopston. I hope I have shown that what the noble Lord, Lord Lovell-Davis, seeks to do—I am presently so advised and am of that opinion—would not be very sensible.

I shall not delay the Committee on this matter, important though it is. The Government's resistance to the amendment, it seems to me, exposes one of the basic flaws in the Bill; that is, the lack of parliamentary accountability for the major decisions that will be involved in implementing it. I think that the Government are defending what in this case is plainly indefensible—a total disregard for the public interest. The noble Earl, Lord Mansfield, may have referred to rhetoric and hyperbole. Nonetheless he cannot escape the fact that this is a vitally important matter. Asking for the affirmative procedure to be used is at least an advance on the negative procedure. It seems to me that it is not really asking for much, and I am surprised that the Government will not accept the amendment.

The noble Earl referred to the telecommunications Act and the Transport Act as not being subject to parliamentary procedure, either. It seems to me that the present Government are building up a record for avoiding parliamentary scrutiny and breaking their pledge to ensure that Parliament, and no other body, stands at the centre of the nation's life and its decisions. I do not think that the Minister's replies have satisfied noble. Lords on this side of the Committee, and here I include, if I may, the noble and learned Lord, Lord Wilson of Langside, and the noble Lord, Lord Tanlaw, on the Liberal Benches.

This matter is far too important to be left as it is. I really must register our total opposition to the clause as it stands. However perhaps I should emulate what the noble Lord, Lord Strathcona and Mount Royal, did on an earlier occasion, as the noble Lord, Lord Mottistone, has recommended, and at this stage beg leave to withdraw the amendment.

§
.—(1) For the purpose of applying paragraph 3(b) of Part IV of Schedule I to the Trustee Investments Act 1961 (which provides that shares and debentures of a company shall not count as wider-range and narrower-range investments respectively within the meaning of that Act unless the company has paid dividends in each of the five years immediately preceding that in which the investment is made) in relation to investment in shares or debentures of a company to which this section applies during the first investment year or during any year following that year, the company shall be deemed to have paid a dividend as there mentioned—

(a) in any year preceding the first investment year which is included in the relevant five years; and

(b) in the first investment year, if that year is included in the relevant five years and the company does not in fact pay such a dividend in that year.

§
(2) This section applies to any company of which shares have been transferred to the Secretary of State or a nominee of his by an order under section 3(4) or 11(4) above.

"the first investment year", in relation to a company to which this section applies, means the calendar year in which the relevant order or, as the case may be, the first such order was made; and

"the relevant five years" means the five years immediately preceding the calendar year in which the investment in question is made or is proposed to be made.").

§
The noble Earl said: This amendment is much simpler in both design and effect than it appears to be. Its purpose is to enable certain trusts to invest in the shares of Britoil if they wish to do so. The new clause would also apply to a new company to which their gas corporation's offshore oil assets were transferred under the Bill, if the same privatisation route were followed in that case.

§
The wording of the new clause closely follows the precedents that were set in Section 9 of the Civil Aviation Act 1980 and in Section 11 of the British Aerospace Act 1980. The Trustee Investments Act 1961 lays down certain investment guidelines. These guidelines are effectively superseded by the provisions of most of the larger, or more recently established, trusts, but there are still quite a number of trusts to which they apply.

§
I can explain the amendment in much greater detail if any Member of your Lordships' Committee wishes me to do so, but basically its purpose is to allow the older and smaller trusts to invest in Britoil as a trustee investment in exactly the same way as a newer trust can. I beg to move.

§Lord Underhill moved Amendment No. 50:
Page 54, leave out lines 37 to 43 and insert—("(7) An order under subsection (6) above shall apply only where a person notifies the Secretary of State that he proposes to undertake a supply of gas to any premises at a rate in excess of 2,000,000 therms a year.").

§
The noble Lord said: In moving Amendment No. 50 may I speak also to Amendments Nos. 51 and 52. Noble Lords may recall that in the Second Reading debate I referred to the concern which had been expressed by the National Gas Consumers' Council in relation to some of the proposals in Schedule 3. Paragraphs 11 and 12, in amending Section 9 of the 1972 Act, would provide that in future the consumers' councils would be limited to looking after the interests of the mainly domestic consumers; that is, those within 25 yards of any distribution main and taking a gas supply not exceeding 25,000 therms. All the other consumers will not be able to use the facilities and good offices of the consumers' councils. Paragraph 13 relates this same principle to the regional consumers' councils.

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I understand that since the Bill was originally drafted a number of trade associations have argued that the consumers' council is a valuable channel for putting industrial views both to the British Gas Corporation and also to the Government. In order properly to represent consumers' interests, I would suggest that a balance must be struck between the needs of the domestic consumers and the needs of the industrial consumers. This principle has been recognised hitherto by the appointment of industrial representatives to the national council, and at the moment there are eight industrial members on the national council.

§
The amendment seeks to retain this essential balance. It is proposed that the consumers' councils shall deal with all matters relating to all gas consumers with the exception of those very large industrial consumers taking in excess of 2 million therms. The consumers taking between 25,000 and 2 million therms will obviously be a variety of consumers, mostly industrial and commercial users. It is essential that all these consumers should give consideration to safety measures when taking a supply of gas. The consumers' councils, as I think will be recognised by all noble Lords, have always considered the assurance of safety to be one of their most important duties and responsibilities.

§
I understand that the Chemical Industries Association, for example—this is a body which accounts for a high proportion of energy used by the manufacturing industry—is in favour of the continuation of the National Gas Consumers' Council in its present form. In fact, they urge that more time and more attention be given by the council to industrial matters.

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In this matter the Bill departs from previous practice and it puts on one side all valuable previous experience. I would suggest that this change is undesirable; and, what is more, it could be foolhardy to remove many consumers from this very important forum, where problems, including those of safety, can be considered.

§
So far as I can see there is no reason for this restriction. No politics whatever are involved in this amendment; and there would appear to me to be no questions of principle or policy outlook involved in this matter at all. It is one of common sense that all the consumers except those taking over 2 million therms should continue to be able to he represented and their views considered by both the national and the regional consumers' councils. I beg to move.

We are here concerned with the National and Regional Gas Consumers' Councils, which were established by Sections 9 to 13 of the Gas Act 1972 to consider the interests of gas consumers and represent those interests to the British Gas Corporation and where appropriate to the Government. I think few would doubt that the Gas Consumers' Councils have fulfilled a valuable function since their inception, and I wish to pay tribute to the unstinting devotion to the consumers' cause by successive chairmen and members of these councils, including the work of the noble Baroness, Lady Macleod of Borve, who has been present throughout most of the Committee's discussions. The very raison d'etre of the Gas Consumers' Councils lies in the fact that the gas consumer faces a monopoly supplier. Were it not for the consumers' councils, a consumer unable to obtain satisfaction from the gas corporation would have nowhere to turn. The councils thus have a vital role in upholding the consumer interest in the face of monopoly, and there is no intention in this Bill to diminish that role.

However, as we have made clear, a fundamental objective of this Bill is to curtail the monopoly of the gas corporation and permit a large measure of competition in the supply of gas. Where competition occurs, consumers will no longer be at a disadvantage as they are when dealing with a monopoly; if they are dissatisfied, they can take their custom elsewhere. They will no longer need the special protection of the consumers' council. Paragraph 11 of Schedule 3 therefore amends the Gas Act so as to empower the Secretary of State to exclude specified consumers or classes of consumers from the remit of the consumers' councils by order. However the Secretary of State is prohibited from making an order in respect of any consumer within the scope of BGC's statutory obligation to supply on request, and the reason for that prohibition lies in Clause 12 of the Bill: BGC is to retain a monopoly of supply in that area; so clearly there will never be a case for excluding such consumers from the remit of the consumers' councils. Amendment No. 50 proposes, in effect, that the prohibition should extend to all consumers who receive no more than 2 million therms a year. That proposal does not seem to have the same logic about it as does paragraph 11 in its present form. Looking back to Clause 12 of the Bill the figure of 2 million therms a year is important in deciding whether a private supplier needs to obtain the Secretary of State's consent, but it does not set a boundary for private supplies. Private supplies are, on the contrary, permitted, with the Secretary of State's consent, below 2 million therms a year. Indeed, the Government have made clear that they would intend to grant consent in all cases where the safety arrangements proposed were adequate.

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The result of the amendment would therefore be anomalous: where competition occurred above 2 million therms a year, the role of the consumers' councils might be correspondingly restricted, but where an equal degree of competition occurred below 2 million therms a year, no such restriction would be possible. The principle behind paragraph 11 of Schedule 3 is not novel. My noble friend referred to the British Telecommunications Act 1981 which contains an enabling power to restrict the remit of the Post Office Users' Council, again in recognition of the impact of competition.

Incidentally, on the drafting of this amendment, I see that it refers to where somebody, presumably a private supplier, proposes to undertake a supply of gas. As I understand the position, the consumers' councils have nothing to do with suppliers. They are to do with customers; so that I hope the Committee will understand that I am having some difficulty with this amendment for the reasons I have given.

I am very disappointed with the reply. On the Minister's last point, on drafting, one could have got over the question of drafting at this late hour by the Minister saying, "We will take the amendment back and redraft a better one". We have heard about poor Scotsmen; I am a poor little ex-Londoner and therefore your Lordships will have to excuse my wording. That would be a very simple matter to dispose of. Therefore I dismiss the argument about drafting because it is unimportant. The Government could draft that matter quite satisfactorily if they agreed with the principle.

Frankly, I cannot understand the Government's arguments. I hope that other noble Lords take the same view. Surely we are not only wanting consumers' representation where there is a monopoly. There are all sorts of other interests involved. It appears that the Government are bringing their political viewpoint into this matter. When I moved the amendment I made it clear that this was non-political; there are no political principles involved. It is purely a matter of representation of all consumers except the very large ones, which could obviously be represented through their trade associations. To exclude all those consumers using between 25,000 and 2 million therms seems completely illogical.

At this late hour it is rather foolish to divide the Committee. I shall read what the Minister said, but I am certain I shall get no satisfaction from it because he is clearly committed to not moving: I shall take another look at the drafting of the clause and bring the matter back at Report stage. I beg leave to withdraw the amendment.

§Lord Skelmersdale moved Amendments Nos. 53 and 54:
Page 57, line 25, leave out ("(4)(d)").Page 57, line 26, after ("Corporation)") insert—("(a) in subsection (1) for paragraph (e) there shall be substituted the following paragraph—694(e) without prejudice to the generality of the preceding paragraphs, to enter into participation agreements (within the meaning of the Participation Agreements Act 1978) and to do anything required for the purpose of giving effect to such agreements, including agreements entered into by persons other than the Corporation;"; and(b) in subsection (4)(d)").

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The noble Lord said: These amendments replace the reference to participation in Section 2(1)(e) of the 1975 Act with an up-to-date definition based on the Participation Agreements Act 1978. They are to remove any doubt about, or possibility of conflict over, the interpretation of participation to which the power to pay grants to BNOC under Clause 6 is attached. They were mentioned in connection with an earlier Government amendment, No. 16, to Clause 6. I beg to move.

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The noble Lord said: This amendment merely puts right a small drafting error in paragraph 34 of Schedule 3. It has no policy implications. Without the amendment, paragraph 34 would amend Section 49(3) of the Fair Employment (Northern Ireland) Act 1976 to read:
In relation to employment concerned with the any activity falling.…
The amendment deletes the word "the". I beg to move.

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The noble Lord said: This amendment is required because a new clause has been added to the Social Security and Housing Benefits Bill and consequently the relevant clause of that Bill appears as Section 22(3), not 21(3), in the current print. Like the previous amendment, there are no policy implications whatsoever. I beg to move.

May I ask a technical question? This concerns page 57 and the reference to the Employment Protection Act 1975. It will be useful if the Minister can tell us briefly the implications of that. In Schedule 4 there is a reference to the Employment Protection (Consolidation) Act 1978 and a repeal of Section 137(5). I was wondering whether the Employment Protection Act 1975 is part of the consolidation measure, and as the Employment Act 1975 was mentioned I wondered to what extent the Minister may feel this is likely to be applicable to those affected by the legislation. I notice that in the Explanatory and Financial Memorandum it is said that the effect on public service manpower is not expected to be significant. I wonder to what extent this reference in Schedule 3 is likely to be relevant to the people affected by this
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legislation and, if so, how many will be affected by it?

Incidentally, in passing, when the Explanatory and Financial Memorandum refers at the end to the effect on public service manpower being insignificant, I would have thought that those employed, particularly in the British Gas Corporation, were public servants. Perhaps the Government regard only civil servants as being servants of the public, and that those who serve public enterprise in various ways are not classified as part of public service manpower. However, the one question I should particularly like to have answered is: Is the Employment Protection Act 1975 still relevant, or is it consolidated in the 1978 legislation, as mentioned in Schedule 4?

The noble Lord referred to "this late hour" and I was rather surprised to have this sprung on me. Nevertheless, I make no complaint about it. The effect of paragraph 24, to which the noble Lord draws attention, is to refer to the element of Clause 22 which now defines "relevant activities" offshore, and to enable the Employment Protection Act 1975 to be applied by Order in Council in the foreign sectors of cross-boundary fields. We are not making any more amendments than would give effect to that desire. I hope that answers the noble Lord's question.

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The noble Lord said: This amendment completes the repeal of Section 8 of the 1971 Act. Section 8 of the 1971 Act contains a total of five subsections. The extent of the repeal in Schedule 4 currently covers subsections (1), (2) and (3) and part of subsection (5). Subsection (4) enables civil aviation law to be applied to all aircraft, including helicopters, on or in the neighbourhood of offshore installations, and subsection (5) declares that Section 8 shall apply to installations notwithstanding that they are for the time being in transit. Legislation related to civil aviation is being consolidated by the Civil Aviation Bill now before another place. Paragraph 6(5) of Part III of Schedule 13 to that Bill repeats, with appropriate changes, the wording contained in Section 8(4) of the 1971 Act, and paragraph 6(6) of Part III of Schedule 13 makes clear that subparagraph (5) applies also to installations in transit. The inclusion of such provisions in the Civil Aviation Bill, combined with the repeals already proposed by Schedule 4, removes the need to retain any
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part of Section 8, the repeal of which is completed by this amendment. I beg to move.